Jefferies has raised its price target for Treasury Wine Estates shares from AUD14.00 to AUD16.00, citing the potential gains from the reopening of the Chinese market [5f13185a]. The firm expects a minimal impact on the company's FY24 earnings but foresees a substantial rise in EBITS over the longer term. Treasury Wine Estates previously generated approximately AUD200 million in EBITS from the Chinese market, and Jefferies estimates that around 40% of this could be regained through volume and price. The revised estimates and the upgraded price target reflect the anticipation of a significant EBITS uplift by approximately AUD88 million by FY27 as the Chinese market reopens. The company's stock price target adjustment is in line with the changes in the firm's discounted cash flow (DCF) model [5f13185a].
Jefferies has also raised its price target for Torrid Holdings Inc (NYSE:CURV) to $4.80 from $4.00, while maintaining a Hold rating on the stock. Torrid's fourth-quarter earnings exceeded expectations, with revenue and adjusted EBITDA surpassing estimates. The company's gross margins expanded by 250 basis points year-over-year due to reduced product costs and a more disciplined approach to markdowns. Although Torrid's outlook for the first quarter and full fiscal year was slightly below market expectations, the fourth-quarter results were seen as a positive development. Jefferies views the fourth-quarter performance as a step in the right direction for Torrid [e942047a] [c1287bec].
Contemporary clothing brand Guess (NYSE:GES) reported positive fourth-quarter earnings, with a 9% year-over-year increase in revenue and margin expansion. The company's earnings per share (EPS) beat expectations. Guess acknowledged the presence of foreign exchange (FX) headwinds in the first half of the year, but highlighted potential growth opportunities from the recent acquisition of rag & bone and initiatives surrounding the Guess Jeans brand. Jefferies has raised the price target for Guess shares to $29.00, up from $24.00, and expressed caution regarding future consumer trends. The analysts at Jefferies increased the price target and estimates based on Guess's latest financial results and strategic plans [c1287bec] [f432c77d].
Jefferies' decision to raise the price target for Treasury Wine Estates shares is based on the potential gains from the reopening of the Chinese market. The firm expects a minimal impact on the company's FY24 earnings but foresees a substantial rise in EBITS over the longer term. Treasury Wine Estates previously generated approximately AUD200 million in EBITS from the Chinese market, and Jefferies estimates that around 40% of this could be regained through volume and price. The revised estimates and the upgraded price target reflect the anticipation of a significant EBITS uplift by approximately AUD88 million by FY27 as the Chinese market reopens. The company's stock price target adjustment is in line with the changes in the firm's discounted cash flow (DCF) model [5f13185a].